January 2012 Energy Index - Bord Gáis Energy

Bord Gáis Energy IndexJANUARY 2012

Energy Index Graph

Data

31 January 2009 92.10

28 February 2009 87.77

31 March 2009 76.86

30 April 2009 77.63

31 May 2009 84.37

30 June 2009 90.81

31 July 2009 88.62

31 August 2009 88.35

30 September 2009 85.76

31 October 2009 92.39

30 November 2009 94.82

31 December 2009 100.00

31 January 2010 99.62

28 February 2010 103.17

31 March 2010 104.57

30 April 2010 111.22

31 May 2010 110.49

30 June 2010 111.64

31 July 2010 111.05

31 August 2010 109.16

30 September 2010 111.50

31 October 2010 112.64

30 November 2010 121.67

31 December 2010 135.86

31 January 2011 134.21

28 February 2011 140.96

31 March 2011 146.51

30 April 2011 147.76

31 May 2011 140.73

30 June 2011 134.54

31 July 2011 138.57

31 August 2011 138.69

30 September 2011 134.89

31 October 2011 136.14

31 November 2011 143.8831 December 2011 143.22

31 January 2012 144.43

12 Month Rolling Average

31 October 2009 87.80

30 November 2009 87.15

31 December 2009 88.29

31 January 2010 88.92

28 February 2010 90.20

31 March 2010 92.51

30 April 2010 95.31

31 May 2010 97.49

30 June 2010 99.22

31 July 2010 101.09

31 August 2010 102.82

30 September 2010 104.97

31 October 2010 106.66

30 November 2010 108.89

31 December 2010 111.88

31 January 2011 114.76

28 February 2011 117.91

31 March 2011 121.41

30 April 2011 124.45

31 May 2011 126.97

30 June 2011 128.88

31 July 2011 131.18

31 August 2011 133.64

30 September 2011 135.59

31 October 2011 137.54


31 January 2012 141.01

Oil Graph Data

31 January 2009 65.78

28 February 2009 67.03

31 March 2009 68.43

30 April 2009 70.72

31 May 2009 85.34

30 June 2009 90.70

31 July 2009 92.57

31 August 2009 89.31

30 September 2009 86.74

31 October 2009 93.84

30 November 2009 96.36

31 December 2009 100.00

31 January 2010 94.62

28 February 2010 104.90

31 March 2010 112.38

30 April 2010 121.16

31 May 2010 111.65

30 June 2010 112.54

31 July 2010 110.19

31 August 2010 108.17 v

30 September 2010 111.13

31 October 2010 109.88

30 November 2010 121.18

31 December 2010 130.36

31 January 2011 135.62

28 February 2011 149.07

31 March 2011 152.09

30 April 2011 156.15

31 May 2011 149.41

30 June 2011 142.55

31 July 2011 149.27

31 August 2011 146.57

30 September 2011 140.51

31 October 2011 144.47


31 January 2012 155.87


THE BORD GÁIS ENERGY INDEX INCREASES 1% IN JANUARY— INDEX 8% HIGHER THAN IN JANUARY 2011 —

OILOil prices continued to be supported by the ongoing tensions between the West and Iran over its nuclear programme. Following the EU’s decision to ban oil imports from Iran’s from 1 July 2012, there was increased speculation that Iran would retaliate by attempting to close the Straits of Hormuz, an important transit point through which approximately a fifth of the world’s daily oil requirement passes. The possibility of supply disruptions of oil to the globe put upward pressure on prices.

Despite ongoing negotiations between Greece and its investors and fears of a credit event if an agreement is not reached, in general, economic releases in January were positive. On top of the political tensions, positive investor sentiment also supported oil prices as tentative signs of improving economic growth took shape. As a result, oil price rose 2% in January.

OVERALL SUMMARY:Despite reduced demand and unseasonably mild weather across Europe for most of January, the Bord Gáis Energy Index rose 1% in the month as oil prices increased by $4 US Dollars. The possibility of military engagement should Iran attempt to close the Straits of Hormuz in response to international embargoes put upward pressure on oil prices.

1 Mth 1% 3 Mth 5% 12 Mth 8%

1 Mth 2% 3 Mth 7% 12 Mth 15%

60

100

140

180

Poin

ts

Bord Gáis Energy Index 12 Month Rolling Average

Jan-12Oct-11Jul-11Apr-11Jan-11Oct-10Jul-10Apr-10Jan-10Oct-09Jul-09Apr-09Jan-09

60

100

140

180

Poin

ts

Oct-11 Jan-12Jul-11Apr-11Jan-11Oct-10Jul-10Apr-10Jan-10Oct-09Jul-09Apr-09Jan-09

Bord Gáis Energy Index (Dec 31st 2009 = 100)

In January, uncertainty around the health of the global economy continued following the release of lower than expected Q4 GDP numbers for some major economies, reduced growth forecasts for 2012, and numerous ratings downgrades for many European countries. Despite this, improved economic sentiment started to emerge tentatively as some major economies appear to be producing more goods, jobs are being created and confidence is growing. This improved sentiment was underpinned by comments from the ECB President indicating that there are now tentative signs that the euro zone economy is stabilising and from the US Federal Reserve Chairman that the US economy is expanding moderately. This sentiment is feeding through to oil prices.

Oil Index

*Index adjusted for currency movements.Data Source: ICE

Natural Gas Graph

Data

31 January 2009 195.04

28 February 2009 156.23

31 March 2009 99.24

30 April 2009 92.78

31 May 2009 87.00

30 June 2009 87.56

31 July 2009 76.34

31 August 2009 69.43

30 September 2009 61.72

31 October 2009 77.55

30 November 2009 83.21

31 December 2009 100.00

31 January 2010 125.88

28 February 2010 114.44

31 March 2010 101.67

30 April 2010 106.04

31 May 2010 130.73

30 June 2010 145.29

31 July 2010 157.48

31 August 2010 145.96

30 September 2010 132.67

31 October 2010 148.57

30 November 2010 167.11

31 December 2010 204.87

31 January 2011 188.31

28 February 2011 179.74

31 March 2011 194.03

30 April 2011 181.39

31 May 2011 184.99

30 June 2011 183.36

31 July 2011 179.36

31 August 2011 172.82

30 September 2011 180.07

31 October 2011 180.16


31 January 2012 184.35

Coal Graph Data

31 January 2009 102.58

28 February 2009 93.02

31 March 2009 82.80

30 April 2009 78.58

31 May 2009 76.19

30 June 2009 76.68

31 July 2009 81.48

31 August 2009 84.15

30 September 2009 83.00

31 October 2009 86.26

30 November 2009 88.54

31 December 2009 100.00

31 January 2010 105.77

28 February 2010 95.28

31 March 2010 95.51

30 April 2010 108.11

31 May 2010 125.06

30 June 2010 132.03

31 July 2010 121.85

31 August 2010 123.28

30 September 2010 121.29

31 October 2010 121.83

30 November 2010 150.34

31 December 2010 159.48

31 January 2011 148.31

28 February 2011 149.34

31 March 2011 153.91

30 April 2011 148.29

31 May 2011 145.75

30 June 2011 144.90

31 July 2011 147.62

31 August 2011 149.65

30 September 2011 156.20

31 October 2011 145.04


31 January 2012 134.66

Electricity Graph Data

31 January 2009 127.36

28 February 2009 117.38

31 March 2009 89.56

30 April 2009 88.58

31 May 2009 82.33

30 June 2009 91.74

31 July 2009 83.00

31 August 2009 89.26

30 September 2009 87.28

31 October 2009 91.82

30 November 2009 93.65

31 December 2009 100.00

31 January 2010 105.32

28 February 2010 98.50

31 March 2010 90.42

30 April 2010 93.24

31 May 2010 105.19

30 June 2010 104.88

31 July 2010 106.05

31 August 2010 105.66

30 September 2010 109.05

31 October 2010 112.69

30 November 2010 115.75

31 December 2010 136.21

31 January 2011 123.78

28 February 2011 120.12

31 March 2011 129.24

30 April 2011 127.27

31 May 2011 118.10

30 June 2011 112.46

31 July 2011 112.53

31 August 2011 118.86

30 September 2011 117.61

31 October 2011 114.14


31 January 2012 117.47


COALEuropean coal prices fell 8% in January. Low demand for coal in Europe due to relatively mild winter weather (reducing demand for coal to generate electricity to produce power to heat homes) and already high inventory stocks, as well as an oversupply of alternative for power generation such as natural gas, put downward pressure on prices. High wind levels in January, particularly in Germany, also meant that power plants that run on coal and other fossil fuels received less running time and stock piles of coal were not depleted.

In addition to reduced European demand, lower Chinese and Indian buying as well as projected negative economic growth in Europe in 2012 also weighed on the market. Coal price did receive some support from a stronger euro versus the US Dollar (making coal cheaper for European buyers and potentially boosting demand), and higher oil and German power prices.

ELECTRICITYIrish wholesale electricity prices were 2% lower in January compared to December. Unseasonably mild weather for most of the month and consistently high winds put downward pressure on wholesale prices.

High wind levels meant that the electricity produced by more expensive thermal plants was substituted with cheaper electricity from wind farms over extended periods in January. The consistent nature of the wind generation also meant that fossil fuel generators were started less often which helped to keep wholesale prices low.

NATURAL GASThe January average Day-ahead gas price was lower than its December equivalent by 3%. Despite very cold weather at the end of January across Ireland, Britain and continental Europe, temperatures during the month were generally mild and gas demand was relatively low for the time of the year.

Low demand resulted in UK storage facilities being at around 73% full at the end of January compared to 38% the previous year. High storage levels after 4 months of winter put downward pressure on prices. Reduced gas demand was also seen in Europe as evidenced by data released by Societe General, stating that European gas demand slumped 9.5% in 2011.

Colder conditions toward the end of the month caused an increase in storage withdrawals and a spike in natural gas prices.

1 Mth -3% 3 Mth 2% 12 Mth -2%

1 Mth -8% 3 Mth -8% 12 Mth -9%

1 Mth -2% 3 Mth 0% 12 Mth -5%

Poin

ts


100

150

200

250

Poin

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95

150

205

260

Poin

ts


100

140

180

Natural Gas Index

Coal Index

Electricity Index

*Index adjusted for currency movements.Data Source: Spectron Group

*Index adjusted for currency movements.Data Source: ICE

Data Source: SEMO

EUR/USD

31 January 2009 1.283

28 February 2009 1.272

31 March 2009 1.323

30 April 2009 1.321

31 May 2009 1.412

30 June 2009 1.405

31 July 2009 1.424

31 August 2009 1.434

30 September 2009 1.464

31 October 2009 1.474

30 November 2009 1.498

31 December 2009 1.433

31 January 2010 1.389

28 February 2010 1.360

31 March 2010 1.353

30 April 2010 1.327

31 May 2010 1.230

30 June 2010 1.226

31 July 2010 1.305

31 August 2010 1.269

30 September 2010 1.362

31 October 2010 1.392

30 November 2010 1.304

31 December 2010 1.337

31 January 2011 1.370

28 February 2011 1.379

31 March 2011 1.419

30 April 2011 1.483

31 May 2011 1.437

30 June 2011 1.451

31 July 2011 1.438

31 August 2011 1.441

30 September 2011 1.345

31 October 2011 1.395


31 January 2012 1.3084

EUR/GBP

31 January 2009 0.887

28 February 2009 0.886

31 March 2009 0.925

30 April 2009 0.894

31 May 2009 0.874

30 June 2009 0.853

31 July 2009 0.853

31 August 2009 0.881

30 September 2009 0.914

31 October 2009 0.896

30 November 2009 0.913

31 December 2009 0.888

31 January 2010 0.867

28 February 2010 0.893

31 March 2010 0.891

30 April 2010 0.868

31 May 2010 0.846

30 June 2010 0.819

31 July 2010 0.831

31 August 2010 0.827

30 September 2010 0.866

31 October 2010 0.869

30 November 2010 0.837

31 December 2010 0.857

31 January 2011 0.854

28 February 2011 0.849

31 March 2011 0.883

30 April 2011 0.888

31 May 2011 0.874

30 June 2011 0.903

31 July 2011 0.875

31 August 2011 0.885

30 September 2011 0.860

31 October 2011 0.8615


31 January 2012 0.8302


FX RATESIncreasing hopes that Greece and its creditors were getting close to an agreement in the latter part of January, that would allow it to receive a second round of international aid, stabilised the euro and improved market sentiment toward the region. This improved sentiment was also reflected in what was perceived to be successful debt sales by European countries which resulted in falling European borrowing costs.

Despite the euro hitting a 16 month low of 1.27 versus the US Dollar on the 16th of January following downgrade announcements, the euro appreciated by 1% in the month. Improved confidence in the prospects of global economic stability may have also encouraged investors to reverse some of the safe haven flows into US Dollar denominated assets. The euro was unchanged versus the Pound Sterling in January.

MARkET OUTLOOk:There are a number of variables at play which have the potential to increase or decrease commodity fuel prices in the coming months. The outcome of the ongoing discussions between Greece and its bondholders on cutting the nation’s debt burden has the potential to stabilise or destabilise the fragile European and global economy. Despite some positive economic releases and improving investor sentiment, confidence is at this stage very tentative and will be influenced heavily by releases which will provide further evidence about the true state of the global economy in the months ahead.

Continuing cold weather in continental Europe has the potential to deplete heavy stocks of coal and gas and this could put some upward pressure on prices. Finally, Iran’s reaction to the embargoes being imposed and the West’s attitude toward its nuclear programme has the potential to escalate tensions in a region that is vital to global oil supplies.

For more information please contact: Fleishman-Hillard — Aidan McLaughlin — 085 749 0484 Bord Gáis Energy — Christine Heffernan — 087 050 5555

RE-wEIGHTING OF BORD GÁIS ENERGY INDEX:Following the SEAI’s 2009 review of energy consumption in Ireland, released in Q4 2010, there was a 9.3% drop in overall energy consumption. The most notable drop of 1.39% was in oil consumption in the form of gasoline and diesel. This reflects the economic downturn experienced at the time. The share of natural gas and electricity increased by 0.63% and 0.57% respectively. An increase in the use of renewables and peat, at the expense of coal in electricity generation was also observed. As a result the Bord Gáis Energy Index has been reweighted to reflect the latest consumption data. This has had a minimal effect on the overall shape of the Index, but may indicate future trends.

Disclaimer:The contents of this report are provided solely as an information guide. The report is presented to you “as is” and may or may not be correct, current, accurate or complete. While every effort is made in preparing material for publication no responsibility is accepted by or on behalf of Bord Gáis Eireann, the SEMO, ICE Futures Europe, the Sustainable Energy Authority of Ireland or Spectron Group Limited (together, the “Parties”) for any errors, omissions or misleading statements within this report. No representation or warranty, express or implied, is made or liability accepted by any of the Parties or any of their respective directors, employees or agents in relation to the accuracy or completeness of the information contained in this report. Each of the Parties and their respective directors, employees or agents does not and will not accept any liability in relation to the information contained in this report. Bord Gáis Eireann reserves the right at any time to revise, amend, alter or delete the information provided in this report.

1 Mth 1% 3 Mth -6% 12 Mth -4% EURUSD

1 Mth 0% 3 Mth -4% 12 Mth -3% EURGBP

Oct-11 Jan-12Jul-11Apr-11Jan-11Oct-10Jul-10Apr-10Jan-10Oct-09Jul-09Apr-09Jan-090.60

0.80

1.00

1.20

1.40

1.60

FX Rates

Electricity 18.40%

Coal3.16%

Gas 13.52%

Oil 64.93%

January 2012 Energy Index - Bord Gáis Energy

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